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Abstract
This article examines how the structure of the automotive industry in the West Midlands has changed since the 1970s. In the early 1970s the region accounted for about 60% of total car production in the UK. By 2008, this had dwindled to 18%. The discussion here will focus particularly on the most likely reasons for the decline in volume production and the area’s increasing reliance on relatively small scale luxury car production. The automotive industry was caught up in the general de-industrialisation that took place in the region since the mid-1960s prior to the economic crisis of the early 1980s, as well as suffering from the effects of increasing globalisation in the car industry itself. By 2008 the context for the sector had become the global financial crisis. Due to a lack of economies of scale and investment domestic firms such as British Leyland (BL) and Rootes became increasingly unable to compete in the market place despite restructuring and government intervention. Similarly, foreign direct investment (FDI) by firms such as Chrysler, Peugeot, BMW and Ford through a series of takeovers failed to restore prosperity and eventually all of them withdrew from the region. The outcomes have led to factory closures and a hollowing out of both the assembly and component sides of the industry, leaving the region heavily dependent on Jaguar and Land Rover (JLR) which was acquired in 2008 by the Indian conglomerate, Tata. This article assesses the reasons for the decline of the automotive sector in the West Midlands region by contextualising its growth and decline against that of the UK auto sector as a whole. Considerable emphasis is placed on the fates of a number of key firms in the region – the British Leyland Motor Corporation (BLMC), MG Rover, Rootes and Jaguar – with explanations offered for their respective failures.
Notes
1. Collis and Roberts, “Foreign Direct Investment.”
2. Richardson, “The British Motor Industry.”
3. Thoms and Donnelly, “The Coventry Motor Industry.”
4. New Automotive Innovation and Growth Team “An Independent Report.”
5. Dicken, “Global Shift.”
6. Ibid; MacNeill and Bailey, “Changing Policies.”
7. Gomes, Donnelly, Collis and Morris, Mergers and Acquisitions.
8. The Times, “Coventry’s Industries.”
9. Williams, Williams and Thomas, Why are the British so bad at Manufacturing?; Wilkes, “Industrial Policy.”
10. Collis, Donnelly, Gomes and Morris, “Upgrading the Automobile Industry.”
11. Rhys, “The Motor Industry.”
12. Williams et al., Why are the British so Bad at Manufacturing?; Bhaskar, “The Future”; Whisler, “The British Motor Industry.”
13. Dunnett, “The Decline.”
14. Thoms and Donnelly, “The Coventry Motor Industry.”
15. Coffey, “Production Counterfeits.”
16. Adeney, “The Motor Makers.”
17. For figures on automotive production in the UK and the West Midlands please see Appendix 1.
18. Thoms and Donnelly, “The Coventry Motor Industry.”
19. The Society of Motor Manufacturers and Traders (SMMT), Annual Reports 1970–2008.
20. Donnelly, Barnes and Morris, “Restructuring the Automotive Industry.”
21. Collis et al., “Upgrading the Automobile Industry.”
22. Turner, The Car Makers.
23. Thoms and Donnelly, The Coventry Motor Industry, 2000.
24. Church, The Rise.
25. Ibid.
26. Williams et al., “Why are the British so Bad at Manufacturing?”
27. Foreman-Peck, Bowden and McKinlay, The British Motor Industry.
28. Thoms and Donnelly, The Coventry Motor Industry.
29. Ibid.
30. The Ryder Report “British Leyland: The Next Decade.”
31. Thoms and Donnelly, The Coventry Motor Industry.
32. Ibid.
33. Edwardes, Back from the Brink.
34. Ibid.
35. Egan, “The Money Programme.”.
36. Wood, The Wheels of Misfortune
37. Thoms and Donnelly, The Coventry Motor Industry.
38. Donnelly, Morris and Mellahi, “Rover-BMW.
39. Ibid; Gomes et al., Mergers and Acquisitions.
40. Berkeley, Donnelly, Morris and Donnelly, “Industrial Restructuring.
41. Thoms and Donnelly, The Coventry Motor Industry.
42. Young and Hood, Chrysler UK.
43. Ibid.
44. Ibid.; Thoms and Donnelly, The Coventry Motor Industry.
45. Young and Hood, Chrysler UK.
46. Just Auto, “Peugeot Confirm”; BBC Television, “Unions Seek Talks”; Davies, “Fears Mount”; Hope, “New Blow for Coventry; The Times, “Peugeot’s English Lesson”; Autocar, “Why Ryton is Closing.”
47. Scheele, “The Acquisition.”
48. O’ Connell, “Focus Wanted.”
49. Gomes et al., Mergers and Acquisitions.
50. BBC news, “Tata Starts.”
51. Tovey, “Jaguar Land Rover.”
52. Foreman-Peck et al., The British Motor Industry, 67.
53. Ibid., 90.
54. Coffey, “Production Counterfeits.”